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Obamacare's Doctor Dilemma

The U.S. faces a shortage of doctors. And influential members of both parties say Obamacare is going to make it worse.

America has a looming problem -- and Obamacare is going to make it worse. That's the conclusion from two former U.S. Senate majority leaders -- one a Democrat and the other a Republican.

It's rare that two influential members from both major U.S. political parties agree on anything related to the Affordable Care Act, commonly referred to as Obamacare. But former Democrat Senate Majority Leader Tom Daschle from South Dakota and former Republican Senate Majority Leader Bill Frist from Tennessee recently co-wrote an article in Health Affairs that pointed out that the U.S. faces a doctor dilemma. And they say that Obamacare seems likely to make the problem even bigger.

A dearth of doctorsWhat is this doctor dilemma? Daschle and Frist wrote that there are "alarming doctor shortages across the country." They're right.

The state of Hawaii reported 18% fewer doctors than needed in 2012. A recent study in the Greater Cincinnati area also found an 18% shortage of primary care physicians in that region. Actual and projected physician shortages have been identified in at least 33 states in the past few years. The U.S. Department of Health and Human Services says that around 30 million Americans live in areas where there are too few health-care providers.

This problem isn't going away. The Association of American Medical Colleges projects that the U.S. faces a shortage of more than 90,000 physicians by 2020. That shortfall will grow to over 130,000 by 2025. These numbers more optimistic than estimates from the American Academy of Family Physicians, which projects a shortage of nearly 149,000 doctors by 2020.

Obamacare makes it worseSeveral factors are driving the need for more physicians. Although the overall U.S. population is growing only modestly, more people translates to demand for more doctors. According to the U.S. Census Bureau, the number of elderly Americans will double by 2030 -- with increased need for medical services.

While demand for physicians increase, one out of every three doctors currently practicing in the U.S. is over age 55. Many of these doctors will retire in the next decade. Medical schools have experienced increased enrollment over the last four years, but the number of potential new doctors isn't enough to offset the other trends.

Daschle and Frist say that Obamacare will make the physician shortage even worse. A report published in the Annals of Family Medicinesupports their view. The study projected a physician shortfall of 52,000 by 2025 -- lower than some of the other estimates. However, research data indicated this need for more doctors is 18% higher than it would have been without implementation of Obamacare.

How will Obamacare worsen the physician shortage? The clearest way is through increasing demand for health care itself. If health reform enables 30 million more Americans to gain insurance as intended, these individuals will in all likelihood seek more medical care than before they had insurance. It's this impact that brought Dashle and Frist to agree that Obamacare could lead to more challenges in balancing the supply and demand for physicians.

SolutionsThe former senators point to technology as a key opportunity for solving the problem. Several experts asked recently by the Wall Street Journal about how to address the physician shortage also indicated that use of technology could help, particularly with helping doctors work more efficiently and shifting more care to home settings. Such solutions also present opportunities for investors.

One company working to help make physicians more efficient is athenahealth(NASDAQ:ATHN). In June, health-care research firm KLAS named the company's electronic medical record system as the top-ranked system for physicians in terms of usability, efficiency, and effectiveness. The stock is up 44% year-to-date.

IBM (NYSE:IBM) hopes to change the way physicians provide care with its Watson technology. Big Blue is targeting the natural language capabilities, hypothesis generation, and evidence-based learning capabilities of Watson to support doctors in diagnosing and treating patients. What could be interesting is how this technology might also enable other health-care providers such as nurse practitioners and physician assistants to provide higher level of care.

Some observers maintain that the physician shortage is really more of a location problem. Some areas have plenty of doctors while others have too few. Telemedicine is a technology that could help alleviate this issue. Research firm InMedica thinks that the use of telemedicine and related technologies will explode more than 700% by 2017.

Qualcomm (NASDAQ:QCOM) looks to be a winner if this prediction comes true. Its Qualcomm Life unit focuses on remote health management. The company's 2Net cloud platform for connecting biometric devices to remotely hosted applications opens the door to a wide array of possibilities for health-care providers to remotely monitor patients.

Even if other solutions are implemented to help solve the nation's doctor dilemma, these technology companies should benefit from increased use of their products. A shortfall in the number of physicians could lead to a windfall for smart investors.

Author

Keith began writing for the Fool in 2012 and focuses primarily on healthcare investing topics. His background includes serving in management and consulting for the healthcare technology, health insurance, medical device, and pharmacy benefits management industries.
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